In a case involving the $50 million expansion of the Minneapolis Institute of Arts (MIA), 2400 3rd Ave. S., the Court ruled that the city misread state law and took too long to review developments and handle any appeals. The result: developers and property owners such as

Chanen can perhaps go ahead with projects that have been rejected.

City Councilmember Gary Schiff (9th Ward) called the decision "a big blow to neighborhood participation" because it reduces the time for public comment on such things as site plan reviews, zoning changes, conditional-use permits and variances.

The city has not yet decided whether to appeal to the Minnesota Supreme Court, Schiff said.

The issue

Here's how the city's development procedure had worked:

A developer submits plans to the city's Planning Commission. The city must act in 60 days, or the project is approved automatically. Under some circumstances, a decision can be delayed another 60 days, for a maximum of 120 days, but the city must provide the developer written notice before the first 60 days expires.

Assistant City Attorney Carol Lansing said the statute was written to address developers' legitimate concern -- preventing municipal foot-dragging.

In the MIA's case, the Planning Commission approved expansion plans Sept. 9, 2002, within the 60-days of the initial application. Two Whittier residents, Paul Smith and Donna Moreno, appealed the decision as "arbitrary and capricious," contending the MIA's addition would block their sun and improperly boost traffic, among other problems.

Smith -- a city Zoning inspector -- said he reminded Planning staff it needed formally to notify the MIA of the appeal.

However, Lansing said the city did not notify the MIA because it believed the appeal was a new request, triggering a new 60-day clock. Eventually, the City Council -- which decides Planning Commission appeals -- rejected Smith's and Moreno's case 7-4.

The Whittier couple then took the city to court, spending $10,000 on their fight. However, the Appeals Court threw out their suit as moot.

The Court wrote that the Smith/Moreno appeal was not a new request, but an extension of the ongoing review of the MIA's request. The appeal did not start a new 60-day clock. Because the city had not acted within the allotted time, the project could go forward. The City Council's action was meaningless, so Smith and Moreno could not take it to court.

Northern Auto

The salvage yard story adds a different twist.

Northern Auto recycles junk cars. It strips them and sells the parts for salvage. It would save money using an on-site car crusher rather than hauling cars off-site, Chanen said. He had asked the Planning Commission to let him permanently locate mobile car crushers on-site, something Northern Auto's zoning did not

permit.

Chanen completed his application March 7, 2003, according to Planning Department documents. Its first 60-day deadline was May 6. It was extended at the city's request a second 60 days to July 5.

The Planning Commission approved Northern Auto's plan 6-2 June 2, within the appropriate timeframe. Housing developer Kit Richardson and North Loop Neighborhood Association Chair James Grabek appealed the next day, June 3, saying the car crusher was incompatible with the neighborhood's increasingly residential character.

The Planning Department then added new information that worked against Chanen. It said Chanen needed to have the car crushers fully enclosed, and its plans only had them partially enclosed.

The City Council upheld the Richardson/Grabek appeal 10-2 -- on Aug. 8, beyond the 120-day limit. Under the Court of Appeals MIA ruling, it opens the decision to litigation.

"I think we are in a pretty good spot, because of that precedent," Chanen said.

Michael Orange, the city planner who worked on the project, said he could not comment on how the Court of Appeals ruling might affect any future Northern Auto litigation. He said that Chanen filed an amended application on June 3.

"It was a significantly different application. It means we started the clock again, based on those changes."

By Orange's calculation, the clock on the amended application did not run out until Oct. 1, after the City Council had made its decision.

Chanen said he will wait a few months to make a decision on whether to challenge the city's final ruling.

Speeding up reviews

Lansing said past city decisions would stand. Developers who thought the Court of Appeals decision could affect prior votes would have to challenge them in court.

Barbara Sporlein, city planning director, said the city anticipated losing the court case and had begun making changes in the review process months ago. It is still reviewing its timelines.

"There is pressure," she said. "I think there were over 1,000 applications that went to the Planning Commission and the Board of Adjustment last year. That is a lot of paper to move."

Because the court ruling effectively chops the maximum review time from 240 days to 120 days, Schiff said he is looking for ways to bring neighborhoods into the process sooner. For instance, the Planning Department sends Councilmembers a weekly e-mail list of all new Planning applications.

"We may develop an e-mail list for neighborhood associations where we send that list out electronically," he said.

Another option is to better coordinate Planning Commission and the City Council's Zoning and Planning Committee meetings to reduce lag time in handling appeals.

"The Planning Commission is very committed to making sure neighborhoods have an opportunity to review these cases and give feedback, and the Appeals Court has made it more difficult for us," Schiff said.

As for Paul Smith, he says he and Donna Moreno never got their day in court. The Appeals Court did not rule on the merits of their case. It approved the MIA's expansion because the city failed to follow the rules.